Determining Your Budget: How Much Money Do You Need to Buy A Home in Texas?

How Much Money Do You Need to Buy a Home in Texas? First and foremost, you should not just focus on the down payment, although that's not a bad place to start. When you contact a Mortgage Consultant, they will typically walk you through a few scenarios and help you determine which type of loan is best for your financial situation.

When buying a home, you need to consider the following cash factors:

• Down payment - min. 3.5% FHA or min 5% Conventional of the purchase price
• Earnest money -usually requested by the seller, but overall will be deducted as part of the transaction
• Hazard Insurance - typically, insurance companies require the first year to be paid upfront
• Closing Costs & Pre-paid Expenses - Displayed on the Good Faith Estimate which is provided by a Mortgage Consultant.
  • Lender Costs
  • Title Costs
  • Pre-paid items - 2 to 3 months worth of hazard insurance/tax reserves
  • Mortgage Insurance Premium - Can be financed into the loan
  • Can negotiate with the seller to pay for some/all of the closing costs (speak with your Real Estate Agent)
• Reserves - 2 to 3 months worth of cash reserves, after all costs above are paid.

As you can see, there are many factors to consider when buying a home in Texas. The exact amount needed to close can fluctuate depending on the loan amount, property taxes, and hazard insurance plan. For an accurate breakdown of what fees to expect, contact your local Mortgage Consultant.

These items should be determined before you make an offer on a home. Part of your offer will include the request for the seller to pay for some of the closing costs. Without knowing the closing costs, it makes it harder to request the exact amount (although it can be done).

Have you hired a Real Estate Agent? Watch for my upcoming post which will help you narrow down your search for a Real Estate Agent in your area. If you are in the market and need a few suggestions, feel free to contact me directly as I can assist you with finding a Real Estate Agent anywhere in the state of Texas.